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What are the pros and cons of angel investor funding?

by | Aug 26, 2021 | Raising Capital

In New York and around the country, many entrepreneurs decide to create startups. Unless the owner is bankrolling this venture, a startup will likely depend on funding from investors. Fortunately, certain wealthy individuals are happy to invest in these companies, and they are often called angel investors. With that in mind, here’s more information about the pros and cons of partnering with angel investors.

Angel investors accept most ventures

When a startup needs to take care of matters involving capital raising, it’s not always easy to find willing participants. Fortunately, you shouldn’t have this problem after partnering with an angel investor. That’s because many of these investors don’t mind taking on more risk than others.

Potentially having support

In most cases, angel investors are more than happy to lend you advice about business and investing-related decisions. By offering this advice, they can serve to further help their investments increase in value. This exclusive level of guidance isn’t something that most entrepreneurs have available to them.

It can take a while to receive funding

If you need funding fast, angel investors probably aren’t the best short-term partners. This is because, in most cases, it can take from one to nine months for your startup to receive funding.

Relinquishing control

Another potential drawback of angel investor funding is trying to partner with someone who oversteps their boundaries. Many angel investors expect a certain level of power and respect. However, certain inexperienced investors might try to take over your startup in a way that you’re not comfortable with.

To summarize, angel investor funding has its advantages and disadvantages. Weigh the pros and cons of this type of funding heavily before deciding to accept money from an angel investor.